Fruit pulp or fruit juice based drinks classifiable under CTH 22029920

Commissioner of Customs (Prev.) Vs Anutham Exim Private Limited (CESTAT Kolkata)

Conclusion: The goods imported by assessee, such as, Big Cola, Big Orange Cola, Big Lemon etc., which they described as ‘carbonated beverage with fruit juice’ were neither carbonated beverage alone nor fruit juice alone gave the essential character of the products in question; both contribute to its essential character. The issue could not be resolved as per Rule 3(a) and 3(b) of the Rules of Interpretation and therefore resort was to be made to Rule 3(c). Since Customs tariff heading (CTH) 22029920 came last in the order, it prevails and the goods were classifiable under this heading.

Held: Assessee-company was an importer of branded drinks namely Big Lemon with fruit juice, Big Kids Jeera with fruit juice, Big Kids Orange with fruit juice, Big Lemon Lime with fruit juice etc. They classified these products as “fruit pulp or fruit juice based drinks” under Customs Tariff heading 22029920. Goods which were imported were chargeable to customs duty as per the Custom Tariff and were also chargeable to Integrated Goods and Services Tax (IGST) as was applicable to the corresponding goods sold in India. The issue which fell for consideration in this appeal was whether the goods imported by assessee, such as, Big Cola, Big Orange Cola, Big Lemon etc., which they described as “carbonated beverage with fruit juice” were classifiable under Customs Tariff Heading 22021090 and 22021020 as claimed by Revenue or were classifiable under 22029920 as claimed by the importer. It was held that a decision on this could be made by examining how they were being sold. They were being sold as „Carbonated beverages with fruit juice’- neither as fruit juice based drinks nor as carbonated beverages although the fruit juice content was only 5% (or 2.5% in case of lime). This gave the products their unique characteristic distinct from both carbonated beverages and fruit juices. The FSSAI regulation (2.3.30 clause 3A) also conceived of such a category of products in the market. Thus, they form a separate specie of products known to the market and were recognised as such by FSSAI. The Customs Tariff, however, did not have a separate entry for such products. Thus, Revenue’s contention that the essential character of the products was only carbonated drinks and not the fruit juices was not agreeable. Both components were important. As carbonated beverages, they could be classified under 2202 10 20/ 22021090 (as claimed by the Revenue). As fruit juice based drinks, they could as well be classified under 2202 99 20 (as claimed by the assessee). Neither carbonated beverage alone nor fruit juice alone gave the essential character of the products in question; both contribute to its essential character. The issue could not be resolved as per Rule 3(a) and 3(b) of the Rules of Interpretation and therefore resort was to be made to Rule 3(c). Since Customs tariff heading 22029920 came last in the order, it prevails and the goods were classifiable under this heading. The ruling of the Advance Ruling Authority in the case of IGST and a support to such a decision by the GST Council were not binding precedents for Tribunal. The ruling of the Advance Ruling Authority was not even applicable to any assessee other than the one who sought clarification.

FULL TEXT OF THE CESTAT JUDGEMENT

This appeal and stay application were filed by the Revenue. In this appeal, Revenue is assailing order-in-appeal No.KOL/CUS(CCP)/AKR/299/2020 dated 08/06/2020 passed by the Commissioner of Customs (Appeals), Kolkata. In this regard, the respondent/assessee had approached the Hon’ble High Court of Calcutta by filing W.P.A./8405 of 2020. The Hon’ble High Court of Calcutta was pleased to pass the following order on 04/01/2021:

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